What are the latest trends in the hospitality industry? It goes without saying that the pandemic and ensuing economic downturn greater than the 2008 recession and chaos caused by fluctuation in demand have had a significant impact on hospitality throughout 2020 and 2021 – no doubt with lingering effects. Some innovative responses to this extraordinary situation like attempting to entice patrons back into food and beverage outlets and assure holidaygoers that it is indeed safe to enjoy a hotel stay, have accelerated existing hospitality industry trends and triggered lasting change.
Meanwhile, there has been a shift in society, partly due to changing values after the acute phase of the pandemic. While in 2020 and 2021, the popularity of staycations, hygiene protocols and contactless technologies – all now firmly embedded in the daily activities of hospitality businesses – has risen sharply, some new trends are emerging.
An increased consumer awareness of all things sustainable, purposeful and health & well-being has set new benchmarks for hospitality enterprises. EHL Insights presents to you the current trends in the hospitality industry of 2022.
The 10 trends that are shaping the hospitality industry in 2022
1. Bleisure travelers & hotel work spaces
Working remotely has today become commonplace for many employees and is forecasted to become more than just a passing trend. A shift accelerated by the global public health crisis, an unprecedented number of high-profile companies – with big tech companies like Twitter, Facebook, and Amazon leading the way – announced that they will adopt a hybrid or flexible approach to working remotely. In 2021 alone, the percentage of workers around the world that are permanently working remotely was expected to double.
This means that hospitality venues are being used as make-shift offices for bleisure travelers, as well as locals seeking a change of work environment. This is a great opportunity for hotels and F&B venues to capitilize on the trend and adapt their offering to meet the needs and wants of this emerging segment; ample plug sockets, free high-speed WIFI and great coffee are good starting points.
2. Holistic hospitality, health & well-being
Preventative medicine and self-care are undisputedly trending right now due to the COVID pandemic. The wellness industry is transforming into a booming trillion dollar market and hospitality venues are well positioned to take a large piece of the pie, especially those with existing spa facilities.
In addition to the usual beauty and relaxation spa offering, there is rapidly growing demand for health diagnostic technology and bespoke treatment plans delivered by experts who conduct personal or group sessions to develop vitality, healing, stress management, emotional balance, mindfulness and better sleep. Discover more spa trends for 2022 in this article.
3. Digitalized guest experiences
Apps are increasingly important in the way hoteliers manage the services they provide to their customers and can now control many aspects of the guest cycle and experience. Needless to say, the trend towards digital and contactless services has gained new momentum since 2020. Traditionally, customer-facing services are being given an overhaul thanks to the more widespread use of technology-assisted options, such as mobile check-in, contactless payments, voice control and biometrics.
Consumers who have become accustomed to unlocking their smartphones and laptops using facial and fingerprint recognition will soon come to expect the same convenience in accessing their hotel rooms. Unfortunately for the establishments looking to welcome them, these upgrades may be costly to install and maintain. If you want to stay ahead of the curve, we recommend you dig deep and make the investment.
Today’s guests have grown to expect to be recognized and treated as individuals. Establishments are going the extra mile to personally greet their guests, while tools such as Mailchimp and Zoho have made personalized e-mail marketing accessible to the masses, ensuring highly target audience-specific communications. Far beyond simply adding the customer’s name to email greetings, data provides insight into past buying habits, enabling hotels to tailor their offers and promotions, and automatically provide similar services to previous stays.
Technological platforms such as CRM and CEM use big data to create one-to-one interactions between the guest and the host at scale. AI-powered chatbots have proven to be a customer service asset both during the booking process and in responding to recurring questions.
Hotel operations more generally are increasingly shaped by the use of management systems to monitor and optimize revenues, customer relationships, property, channels and reputation. Not to mention the rising importance of integrated messaging, predictive analytics, customer profiling and middleware, which seeks to connect any disparate systems.
5. Experience economy & essentialism
Customers request both extreme personalization and unique experiences. This could very well lead to the death of the travel agent and the rise of the independent traveler.
Travel guilt is real. Minimalism has reinvigorated the otherwise somewhat dusty saying “less is more”. Travelers are decreasingly seeking lavish displays of wealth, preferring instead to spend wisely, purposefully and make a positive impact on the world. Unique experiences that give back to local communities in meaningful ways are in demand, as are niche properties, adventurous holidays and relaxation retreats.
6. Asset management strategy
The asset-light approach has become prevalent in the industry. The separation between the management of operations and real-estate assets now allows hospitality companies to focus on their core business, thus improving efficiencies.
It however induces additional complexity and potential agency problems, explaining the emergence of new types of jobs, such as asset managers. In addition, new job profiles have emerged following the increasing complexity of the hospitality industry. In parallel, the need for quantitative competencies (for forecasting, budgeting, etc.) has also increased.
7. Solo travel
In the age of mindfulness, many have embraced the meditative value of spending time alone and venturing out into the big wide world unencumbered, interacting and making friends to whatever degree suits. In an effort to make solo travelers feel comfortable, barriers between hotel staff and guests are being lowered, interior design choices made to evoke a sense of homeliness and an informal atmosphere cultivated. This, along with a less stark divide between guests and locals, encourages a feeling of hotel community.
A hospitality trend that is both current and a hallmark of recent years: “sustainability” once again assumes its position. A natural extension of avoiding disposable plastics, eliminating unnecessary paper consumption thanks to opt-in receipts and reducing food waste, more far-reaching ethical and environmental considerations are shaping decisions made at the hospitality management level. Decisions about things as simple as which towel rails to install during renovations have disproportionate repercussions when implemented at scale. Simple eco-friendly switches include replacing miniature toiletries with larger, locally sourced dispensers, choosing ethically produced bedsheets made from organic materials and reducing energy consumption with smart bulbs, etc. Vegetarian and vegan options also harbor well-known environmental advantages.
9. Virtual & augmented reality
Following on from the orientation towards visually appealing content, it seems only natural that businesses in the hospitality industry should seek to capitalize on features such as virtual tours, conjuring up a digital environment for consumers to picture themselves in.
Videos providing 360-degree views of restaurant ambiance, café terraces enveloped in greenery or hotel beachfront locations, for instance, are just the ticket to make an establishment stand out this year. As ever, keeping the access threshold low is key to reaching as broad an audience as possible with virtual reality material: making content accessible on a variety of devices, without the need for a VR headset.
Once on site, guests should be able to whip out their trusty sidekick – their smartphone – and simply point it at real-world artefacts to summon up additional information. Augmented reality uses graphical or informational overlays to enhance in-situ environments. Once they have downloaded the respective app, guests can use this tool to access restaurant opening times, reviews or interactive tourist information maps or even create user-generated content.
10. Traveling less (& Staycations)
Travel restrictions in 2020 and 2021 have facilitated the rise of the staycation. Even with international travel opening back up, between airline price hikes, Covid testing requirements and the complicated bureaucracy involved in going abroad now, many deem foreign travel either too expensive for a big family vacation or not worth the hassle for the weekend breaks of the past. Hence, opting in favor of the staycation trend instead, or simply travelling much less than pre-pandemic levels.
In fact there is a multitude of reasons vacationers may also be choosing to stay closer to home, such as for environmental or budgeting reasons, with this year having seen a marked uptick in holidays spent more locally. Lucky for those who live in an already tourism-rich, picturesque country with a pleasant climate.
Today – Hospitality Industry 2.0
What does the future of hospitality hold? EHL faculty carried out an internal survey with a view to unearth the direction the industry is heading in. Overall, our faculty suggests the need for hoteliers to properly embrace the above mentioned trends and understand what’s at stakes. Six dimensions came out from our survey:
1. Standardization can no longer be the norm
It is becoming critical to personalize and tailor the services to the needs and preferences of the traveler.
2. To create value, focus on niche markets
More customization and specialization may enable increased value creation for hospitality companies. But be careful, as a respondent said, this requires to genuinely think about the value proposition of your offer and not “simply branding and rebranding”.
3. Exploit technology as an accelerator for business
Technology will be at the core of the hotel experience both in room, before and after the trip. This will lead to the development of new concepts and more innovation in the industry, and contribute to the emergence of an ever more individualized offer.
4. Social responsibility is a moral and economic obligation
The impact of global warming can today be considered a major risk for both corporations which may lose in revenues and profits, and society as a whole. It is thus critical for governments, but even more so for corporations, to become more sustainable: “not just green, but real sustainable business models”.
People are becoming increasingly sensitive to environmental and social issues. A respondent said that this “has to be considered in branding, but beware of green-washers: consumers are now well-aware that window-dressing exists and they will not buy it.”
5. Develop more responsive and resilient business models
“Tourism, despite ever-growing flows of travelers, will become riskier and more prone to crises” as the number of travelers steadily continues to grow. This will be accompanied by increased regulation as a response to a disproportional increase in tourist flows in some places (e.g. Venice or Barcelona).
Widespread lockdown, upturned work and childcare schedules have afforded delivery services new importance this year. No longer content with (always) ordering the usual go-to pizza, Chinese or Indian takeaway, consumers are now looking to take things up a notch. Not wanting to forego the frills of fine dining, they are now looking to emulate the experience at home. F&B outlets are making this possible by incorporating drinks deliveries and offering extras: atmospheric candles, QR-code playlists and unexpected freebies. Whilst hotels have played their part in supporting local medical needs and turning hotel rooms into alternative work spaces for those tired with working from home.
6. Manage talents actively
The days of long-lasting employee retention as well as passive, hierarchical management styles are definitely gone. “Attracting, developing and keeping the right talent into and within the hospitality industry remains a core challenge.”
Tomorrow – The Hospitality Industry 3.0?
While, as seen above, the consensus revolves around the need for the industry to evolve in order to better adapt to the current environment, some respondents were more ‘extreme’ and suggested that hotel rooms, as we know them today, “will become a thing of the past”.
These respondents refer to the impact of the sharing economy and the tendency of today’s customers to avoid traditional hotels. They believe that adjustments in the offer, like the ones listed above, are not sufficient and that the industry has to truly reinvent itself.
This standpoint is reinforced by the increasing importance of technology in the hospitality industry and the power that technology firms are acquiring. A respondent elaborates:
Major technology firms will replace most hotel brands, because they can offer technology solutions and create markets to attract customers. The traditional hospitality industry will evolve into niche markets (serving specific types of customers), or extremely luxury sector (so they can afford to pay their staff a reasonable salary). Those who can’t identify their niche will become the money machines for technology companies. Some brands big enough may survive, but their business will get tougher.
While respondents are more or less alarmist as to the future of the industry, all nevertheless agree that it has to evolve and reinvent itself in order to exploit the opportunities and cope with the challenges it faces. The only question remaining is up to which extent this transformation will have to take place.